Carlill v Carbolic Smoke Ball Company [1892] EWCA Civ 1 is a landmark case in contract law that established the principle that a unilateral contract can be created by an offer that is accepted by performance rather than by a promise.
Carbolic Smoke Ball Co. advertised that their product could prevent and cure the flu, and offered a reward of £100 to anyone who caught the flu after using the product as directed. Mrs. Carlill purchased and used the product as directed but still caught the flu. She then claimed the reward, but the company refused to pay. Mrs. Carlill sued the company for breach of contract.
The court held that the advertisement was not a mere puff but an offer that can be accepted by performance, and that the promise of the reward was a unilateral contract. Therefore, she was entitled to the reward. The significance of this case is that a public advertisement can be an offer if the terms are clear and specific.
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